Homeowners Ask: Where is the Love?

by Team IWP! on 24. Apr, 2010 in How to invest in real estate, Lending, Personal Finance Investing

“All I wanna say is that they don’t really care about us” – Michael Jackson

This was a powerful song with an unforgettable message. In 2010, millions of homeowners share in the message that this song delivered. As we stand in the midst of the worst economic storm that our country has seen, many homeowners feel that they’ve been abandoned and left for dead by their lenders. Under President Obama’s Home Affordable Modification Program, homeowners were given new hope through initiatives that were set forth. These initiatives instructed homeowners to contact their lenders at the first sign of trouble. From that point lenders would analyze their financial situation to see what options were available for these individuals.

As the market took a huge turn in 2007-08 and the onslaught of subprime foreclosures loomed, this program sounded like a gift from heaven. Unfortunately according to many consumers, the actual implementation has been nothing but lackluster. For example, a 62 yr. old grandmother called her lender NOT because she was behind but because she was in a 3 year fixed interest only mortgage that was set to adjust. Her lender sent her a preliminary modification package to fill out within two weeks. After several calls to her lender over the next few months she was told that her file was in review. Finally her lender modified her mortgage: her payment went from $1,800 a month to almost $2,700 a month. Her lender’s response you ask? ‘We got you into a fixed rate.’ Well in that case let’s look at the numbers; the HAMP program promised to lower payments to 31% of a homeowner’s gross monthly income. This homeowner grossed $4,200 monthly so why would the lender raise their payments well beyond manageable levels when 31% of their monthly gross is only $1,300? As of this date, the homeowner is now ten months behind and contemplating a future without the home she has lived in for more than twenty years.

I discussed these problems with a Realtor and an Attorney who works with homeowners in distress and they talked about the lackadaisical attitude that they encounter when they speak with a lender’s customer service rep. “How can someone with a 9-5 sit on hold for 2-3 hours during the day? They’ll never get any help!” they said. “If a homeowner really heard some of the things that the reps say, they would just give up.” In the course of an hour, these professionals proceeded to tell me horror stories of customer reps that have hung up, laughed and discredited their efforts altogether. In their opinions they think that with the vast amount of applications that the lenders receive it has compromised one of the most important components of this program which is communication with the homeowner. Many customer service reps have been categorized as insensitive young individuals who don’t grasp the plight of the person on the other end of the phone.

In spite of frustration in communicating with the lender, here are a few suggestions for every homeowner to follow:

- Contact your lender immediately when you detect a problem with making your mortgage payment.

- Find a HUD counselor (www.HUD.gov) in your area to assist you with obtaining guidance with the loan modification process.

- Keep concise paperwork regarding everything that you send to your lender. If there is ever a discrepancy, it’s your word versus theirs and you will probably lose without paperwork to back up your claims. This includes fax confirmations and sensitive financial paperwork.

- Keep in contact with your lender and/or counselor on a weekly basis. Don’t assume that your file is moving along, this is your life and your home. No one cares about your home more than you as the homeowner.

- Reassess your budget; it may be time to see if you’re overspending in some areas.

- Get a copy of all three credit reports for free at www.annualcreditreport.com so you can check for accuracy.

- Ask questions! The only dumb question is the one you never ask.

**********************************************************

By Carlton Smith

Rating: 0.0/10 (0 votes cast)

Rating: 0 (from 0 votes)